The Steps You Need to Take to Purchase Land
Do you want to build your own home from the ground up? You will need to find a good plot of land first. Perhaps you already own a home or other plot of land; you can expand upon your property to build something new. You don’t want to go through this process on your own. Real estate agents don’t just assist with home buying, certain ones can also assist you with securing vacant plots of land as well. When it comes to purchasing land, you’ll want to make sure it is in a good location and of a high quality, especially if you are planning to build a home since you will likely live there for a while.
You Need an Agent
There are real estate agents who specialize in dealing with vacant plots of land and they can help you navigate this process. It is important to know that not all agents are well-versed in this area and you should inquire with them about their experience before making any decisions. The housing market is a much different one than the vacant property market; working with someone who doesn’t have a proper understanding of the market you are looking to buy in would be a disservice to you. Don’t be afraid to ask plenty of questions and ask for details about their past experiences with jobs like this. You can also research them online and see if they have a website where they list their skills or any past client testimonials for your reference. Take your time in this process, you might have to work with a few different real estate agents before you find an appropriate fit.
Are There Any Restrictions?
A typical home is on a property that is zoned for residential use; this is already known by the buyer. The zoning laws for open plots of land are not as straightforward so be sure to let your agent know which type of land you are searching for so that they only show you those. So, if you were looking for land that is zoned for commercial use, you would mention that upfront to avoid purchasing the wrong land type for your intended purpose. You may also reach out to the zoning office in your area when considering a purchase so they can inform you of anything you need to know moving forward. Another issue you could face is a lien on your property, which affects your ownership of the land. You will not be able to own the title outright until the past debt is settled. Also, if a piece of land that you are interested in is located in a very rural area, reach out to the utility company to verify that they will be able to service your home when it is built.
What About Financing?
The financing process for purchasing a home is pretty straightforward; purchasing land is not quite the same. Most lenders will not loan to someone for just a plot of land. The ones who do will raise the interest rates exponentially or ask for higher down payments; even up to half of the market price. Perhaps you have the funds to purchase the land in full. In this case, you might be able to secure a construction loan from a lender. You are more likely to obtain this loan when you have the money to pay in full because there is less risk for the lender and the land can be used as collateral for extra assurance on their part. A construction loan is typically easier to be approved for and the agreement will have better terms.
Is There Anything Else?
Just as with purchasing a home, there are a variety of unexpected things you may find yourself having to deal with. This is why it is so important to be prepared. Set aside additional funds outside of your current budget to prepare for any issues that may arise with the land you are working on. Without enough funds at your disposal, you could find yourself with fees and other repairs that you cannot afford. You should always be prepared for anything. Building a home from scratch can be quite an exciting project. If you have the right agent, plenty of patience, and a good amount of money saved up, you will be able to construct the home of your dreams!